Sam Hall

The Federal Government and Holden have defended recent closed-door discussions on the future of the local manufacturing industry and taxpayer funding, describing media reports on additional assistance as “purely speculative”.

On Thursday, News Limited reports suggested Holden had sought an additional $265 million in government assistance, but Industry Minister Kim Carr told Fairfax: “I don’t know where that figure has come from.

“I’m not in the business of negotiating with the press. If a company comes to me with an issue, they get the respect that they deserve and confidentiality,” he said.

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“There’s no end of ill-informed people prepared to put erroneous material in the newspapers.”

Holden echoed Mr Carr’s sentiments and said it would not comment publicly on the funding process or any meetings it held with either side of government. It is understood Holden wants to clarify its funding position before the Federal election in September, which could play a pivotal role in the car manufacturing industry’s future.

“To execute this next-generation program there are several milestones we must achieve - the two most crucial being reducing our structural costs and improving productivity in our factory, along with the implementation of clear, consistent and globally competitive industry policy,” a statement from Holden read.

The funding talks come as Holden sits down with unions and its workers on a revised enterprise bargaining agreement, havingtabled a $200-a-week pay cut for its 1700 employeesat the company’s plant in Adelaide. Holden has said it costs more than $3000 extra to make a car in Australia than overseas.

A senior member on the Prime Minister’s manufacturing taskforce, Professor Roy Green, said Holden would need to meet strict requirements in order to secure further funding.

Professor Green said Holden was taking the right steps to ensure it remained competitive globally.

“Obviously those reports are purely speculative, and I have to emphasise that. In principle, there is a case for some government co-investment in manufacturing in Australia, in order for us to develop areas of competitive advantage, especially from our high cost base in the context of a high dollar,” he said.

“The point of such co-investment is never to progress simply [as] business as usual. It has to be targeted towards business transformation and that is the purpose of the automotive transformation program.

“Clearly General Motors Holden is more committed to areas of that program than what Ford, which undertook very little transformation let alone improvement of their facilities.”

“We shouldn’t focus on our handful of large car companies to the exclusion of the area which may, in the long term, have greater international competitive advantage,” Green said.

“In any consideration of further co-investment we need to think about how we position our parts manufacturers in such a way that they will be viable in the long term as well. They will clearly have lost some of their market with the demise of Ford in a few years’ time, and it is within the capacity of parts makers to access global markets themselves and also to be more flexible in which industries they supply.”

Mr Carr said the same stipulations for funding have been in place since the $5.4 billion New Car Plan was introduced.

While Holden has remained in the spotlight, Toyota is in a similar position having yet to confirm its local manufacturing plans to replace the current generation Camry it builds at its Altona plant in Victoria.

A Toyota spokeswoman confirmed the company was holding continual talks with both sides of government, but would not divulge details of those discussions.

43 comments so far

I see. So Holden wants $200 a week reduction in pay or $265 million. If they can't get the pay cuts then the money will do. Guess which one the Labor govt. will go for...

Commenter

PEDRO

Location

Sydney

Date and time

July 11, 2013, 5:25PM

When I saw the headline and clicked on it I thought it was going to be a article about Holden still charging a $2000 premium for the sportwagon in the upper models even though they stripped out the BOSE system and sunroof but there you go.

Don't get me started on the lack of a manual gearbox in the wagon range though.

Commenter

Tim

Location

Cronulla

Date and time

July 12, 2013, 10:35AM

I don't think that you do see, or that you read the article in any depth. It's not either/or, it's both!

Commenter

Maggie Doyle

Location

Anakie

Date and time

July 12, 2013, 11:49AM

“I don’t know where that figure has come from" (Kim Carr).

Ok, I see, so Deveroux may not be asking for another 275m - but there's clearly a figure of some size still, isn't there - and it's bound to be huge anyway.

I don't get it. Do we keep giving GMH unlimited billions forever - even if eventually only one VE Commodore rolls off the line a week - just so we can say "we have a car industry"? Is it worth it to produce cars in this country, at any and unlimited cost?

Wouldn't extra money be better spent looking after the workers eventually, who even under the March 2012 strategy, aren't guaranteed employment beyond 2021 anyway?

How come Deveroux was so upbeat then - but now that deal is no longer sufficient only a year and a bit later? Was he really expecting Commodore sales to lift that much?

Commenter

Lester

Location

Date and time

July 11, 2013, 5:26PM

I don't see why there'd be a figure. I'm sure all they are after is a bit of certainty after a change of PM and a whole new ministry.

Commenter

MotorMouth

Location

Sydney

Date and time

July 12, 2013, 10:21AM

...and I guess the taxpayer wants a bit of certainty in return, from Holden. The 250m taxpayer handout pledged in March last year, was meant to pay for both local production of the Commodore until 2017, and then for local assembly of a global platform until 2021. Apparently, that's now all wrong.....

Commenter

Lester

Location

Date and time

July 12, 2013, 1:13PM

Am I right in thinking that you consider $275 million is "huge"?

If so, are you serious? Compared to major defence projects, the NBN and all the mining industry's nice perks it's a drop in the ocean.

1700 production employees, about 1000 support staff, ten times as many direct and indirect suppliers, that's a pretty cheap job creation project even without the other economic benefits such as balance of trade.

Commenter

Maggie Doyle

Location

Anakie

Date and time

July 12, 2013, 4:34PM

@Maggie Doyle - yes, you are right in thinking that I consider 275m huge - and that I am serious.

It's huge in the context that Deveroux is apparently asking for for this much again now, after already having that much pledged by the taxpayer - just 16 months ago......

Commenter

Lester

Location

Date and time

July 13, 2013, 3:58PM

I just don't know how the labor faithful can sit around and smirk about the increase in c02 while arguing that their union mates deserve handouts to build planet-killing v8s.

You lefties are killing the planet in order to make stink boxes for Americans.

The left in Australia should be absolutely ashamed of its filthy c02 creating policies.

# Good on the Liberals for promising to spend 500million less on this stinking industry than labor will- cutting the cord will save the planet while this ongoing whining union bullsh_t will just destroy the planet.

*The left in Australia fails the globe yet again*

Commenter

Alex

Location

Finley

Date and time

July 11, 2013, 5:27PM

We don't make any V8s; the engines are built in North America. We merely provide the chassis and engineering. The engines we do make are some of the most economical of their type on the planet.